This is completely infantile, because the idea of item quality has been completely meaningless for all purposes except determining vendor price and what an item will disenchant into.

The stat budget for an item is determined by item quality and item level. In the original design, the item level determined the character level that could use different items, and the plan was for each successive tier of raid loot to scale up by a degree of item quality.

But even before release, Blizzard decided to make all raid loot purple "epic" quality, and scale using the ilvl modifier rather than the item quality modifier.

There were some experiments with scaling the blues up higher in ZG and AQ 20, but once some blues were better than some epics, people got really confused, and Blizzard stopped doing it.

In the current system, there is a flat cap at ilvl 200, and there are no blue items above it. Blue items similarly capped at 115 in BC. There is no upgrade from a heroic/max level blue other than an epic, and designing things any other way makes itemization unnecessarily confusing.

However, each tier of epic upgrades improves the epic gear of the people who are on the cutting edge of content by a margin that is roughly equivalent to the difference between a heroic blue item and an entry level (Heroic/Regular TOC/Naxx 10) epic. The purple text is completely meaningless; the gap between somebody in heroic blues and somebody in BIS gear prior to the ulduar release is much smaller than the gap between somebody wearing ilvl 200 epics and somebody who is geared from regular mode Coliseum 25.

All these free "epic" loots merely signify an additional tier of progression for players who don't commit to the game beyond what is necessary to do 5 man instances. And this stuff is still an unprecedented 4 tiers below the cutting edge.

The Heroic TOC and badge loot also gives new players a shortcut into current tiers of content, which is crucial, because very few people were doing heroics and 10 man naxx before the badge change. It's logistically unfeasible to demand that new players gear up in content that nobody is using.